INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
WATERFORD CARPETS LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS' CONFEDERATION)
- AND -
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
1. Compensation for loss of overtime.
2. The Company was established in 1969 and manufactures hard-wearing cord carpets, employing a total of 47 workers. The dispute relates to a loss of overtime incurred by approximately 33 production workers who for many years worked substantial overtime.
As a result of a severe down-turn in the market for cord carpets, overtime ceased in October/November, 1995, although there was a temporary resumption in December 1995/January 1996. The Union recognises the Company as a good employer and while acknowledging the current difficult market situation, claims that the Company, on foot of accumulated profits over the years, is obliged to cushion the workers against what is a substantial reduction in earnings. Accordingly, it is seeking compensation of at least £1,500 each. The Company's response is that due to market circumstances (sales were 50% below normal levels) remedial action was required, including 3 redundancies, the shedding of temporary workers, the laying off of permanent workers and the elimination of overtime. Further remedial measures may be required. The Company is not prepared to pay compensation for loss of overtime brought about by economic circumstances. It indicated that overtime would resume when the market improves. In recognition of the fact that the workers were suffering financially, the Company made available a loan facility of £500 before Christmas, which was taken up by some workers. The Company indicated that it would consider reinstating the loan facility again. The dispute was the subject of a conciliation conference under the auspices of the Labour Relations Commission, at which agreement was not reached.
The dispute was then referred to the Labour Court, on the 4th of April, 1996, in accordance with Section 26(1) of the Industrial Relations Act, 1990. The Court investigated the dispute, in Waterford, on the 26th of June, 1996.
3. 1. For nearly 30 years, the Company has been successful, due to a number of factors, not least the contribution of the workforce, with their productivity, flexibility and general co-operation. Overtime has been a feature of the Company's operations and a willingness to work such hours was a requirement.
2. It is understandable that workers would adjust their lifestyles and commitments in line with the level of earning that was a regular feature of the job for so long. A sudden large reduction in earnings would have a severe impact on the workers and their dependants. Accordingly, the Company should help to cushion them against the impact. Compensation in the region of £1,500 nett would be considered to be reasonable by the workers.
1. Overtime working in the Company was required for a number of years to enable the Company to supply demand in its own market. In mid-1995, the demand became dramatically reduced (details supplied to the Court) and adversely impacted on employment figures in the Company. In February, 1995, the Company employed 45 production workers. The figure is currently at 34, with 2 employees on lay-off since January, 1996. There is justification for further redundancies or lay-offs, however, the Company is anxious to maintain as many in employment as possible.
2. The abolition of overtime was necessary in the context of poor trading circumstances. These circumstances were, and are, entirely outside the Company's control. In this context, any compensation for loss of overtime does not arise and cannot be justified. The current lack of overtime does not represent a deliberate strategic attempt by the Company to abolish overtime. It is an inevitable consequence of market conditions.
3. Whilst overtime working was regular, it was never rostered, it was never guaranteed, and was always on a voluntary basis.
4. The Court has previously recommended that, where a reduction in overtime is attributable to market conditions and/or circumstances outside the Company's control, compensation for loss of overtime does not arise; ref: LCR14360 and LCR15048.
5. Wage rates at Waterford Carpets, independent of overtime, are well above those for the Textile and Clothing Industry (details supplied to the Court).
The Court is satisfied that the loss of overtime arose from market forces and, accordingly, does not recommend concession of the Union's claim for compensation.
Signed on behalf of the Labour Court
24th July, 1996______________________
Enquiries concerning this Recommendation should be addressed to Michael Keegan, Court Secretary.